SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C. 20549
                                
                                
                           FORM 10-QSB
                                
       Quarterly Report Pursuant to Section 13 or 15(d) of
               The Securities Exchange Act of 1934
                                
       For the quarterly period ended:  September 30, 1997
                                
                Commission File number:  0-114244
                                
                  WHITE CLOUD EXPLORATION, INC.
     (Exact name of registrant as specified in its charter)

Utah                                              84-0959153
State or Other Jurisdiction                       (I.R.S. Employer
of incorporation or organization)                 Identification Number)

116 Stanyan Street, San Francisco, CA        94118
(Address of principal Executive Offices      Zip Code)

Registrant's telephone number, including area code: None

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to the filing
requirements for at least the past 90 days.

                         Yes   X       No   ____

As of September 30, 1997, there were 100,000 shares of common
stock, par value $.0001, outstanding.

<PAGE>

PART 1.   FINANCIAL INFORMATION

     ITEM 1.   Financial Statements

                 WHITE CLOUD EXPLORATION, INC.
                   Consolidated Balance Sheet
                          (Unaudited)



                                        September           June
ASSETS                                  30, 1997            30, 1997
CURRENT ASSETS:
     Cash and Cash Equivalents          $100                $100
     Prepaid Expenses                   -                   -
     Accounts Receivable                -                   -
     Accrued Interest Receivable        -                   -

          Total Current Assets          $100                $100
OTHER ASSETS:
    Advance to Watchout!                $200,000

       TOTAL ASSETS                     $200,100            $100

LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)

CURRENT LIABILITIES:
      Interest Payable                  $2,663              $     -
      Accounts Payable                  $28,557             $27,055
      Loan Payable                      $200,000            $     -
          Total Current Liabilities     $231,220            $27,055

STOCKHOLDER'S EQUITY (DEFICIT):
     Common Stock, $.001 par value
       - 50,000,000
      shares authorized, 100,000
         shares issued and outstanding  $100                $100
     Additional Paid In Capital         $82,932             $82,932

        Deficit accumulated during the
        development stage               (114,152)           (111,489)
     Total Stockholder's Equity         $(31,120)           (28,457)
      TOTAL LIABILITIES &
        STOCKHOLDER'S EQUITY            $100                $100
The accompanying notes are considered an integral part of these
financial statements
                  

<PAGE>

                WHITE CLOUD EXPLORATION, INC.
          Consolidated Statement of Income and Expense
                           (Unaudited)
                                

                                   Three Months
                                   Ended September 30,
                                   1996      1997

OPERATING REVENUES

     Revenues                      -         -
Gross Profit                       -         -


OPERATING EXPENSES
Salaries                           -         -
Office                             -         -
Travel                             -         -
Professional fees                  -         -
Telephone & Utilities              -         -
Depreciation                       -         -
Miscellaneous                      -         -
Interest expense                   -         -

Total Operating Expense            -         -

OTHER REVENUES & EXPENSES          -         -

Miscellaneous Income               -         -

Interest Accrual                   -         (2,663)

Total Other Revenues & Expenses    -         (2,663)

NET INCOME (LOSS)                  -         (2,663)



 The accompanying notes are considered an integral part of these
 financial statements.
 

<PAGE>

                 WHITE CLOUD EXPLORATION, INC.
              Consolidated Statement of Cash Flows
                           (Unaudited)


                                   Three Months
                                   Ended September 30,
                                   1996      1997

Cash flows from
Operating Activities:              -         -

Net Profit (Loss)                  -         -

Depreciation                       -         -
Stock issued for services          -         -
(Increase) decrease in Accts 
Receivable                         -         -
(Increase) decrease in Prepaids    -         -
(Increase) decrease in Deposits    -         -
(Decrease) increase in Accrued 
Expenses                           -         -
(Decrease) increase in Accts 
Payable                            -         -
(Decrease) increase in Advance 
Payable                            -         -

Net Cash Flows Used for
Operating Activities               -         -

Cash Flows from investing 
activities 
(Purchase) sale of Fixed Assets    -         -
(Purchase) sale of Note Receivable -         -
(Purchase) sale of Lease Interests -         -
Interest Accrual on Loan           -         2,663

Total cash used for investing      -         200,000
Cash flows from financing 
activities                         -         -
Increase (Decrease) in Note 
Payable                            -         200,000
Sale of Common Stock               -         -
Total Cash from financing
activities                         -         200,000

Increase (Decrease) in cash        -         -
Cash and cash equivalents -
beginning of period                100       100

Cash and cash equivalents -
end of period                      100       100
The accompanying notes are considered an integral part of these
financial statements.


<PAGE>

ITEM 2.

Management's  Discussion and Analysis of Financial Condition  and
Results of Operations

Results of Operations for Period ended September 30, 1997

      The Company incurred no expenses for the three month period
ended  September  30  in  either 1996 or  1997.   There  were  no
operations  or  revenues for the period in either 1997  or  1996.
The  Company recorded neither profit nor loss for the  period  in
1996  but  in 1997 had a loss of $2,663 due to interest  accrual.
Loss  per  share was $.027 in the period in 1997 compared  to  no
loss  or profit in the 1996 first quarter.  While the Company  is
seeking capital sources for investment through private placement,
there is no assurance that capital sources can be found.

Liquidity and Capital Resources

      The  Company  had nominal cash capital at the  end  of  the
period.  The Company will be forced to make private placements of
stock  in  order to fund operations commencement.   No  assurance
exists as to the ability to make private placements of stock.


PART II
                       OTHER INFORMATION

Item 1.   Legal Proceedings - None.

Item 2.   Changes in securities - None.

Item 3.   Defaults upon senior securities - None.

Item  4.   Submission of matters to a vote of security holders  - None.

Item 5.   Other information -

      On  September  3,  1997, the Company entered  into  a  loan
arrangement  with certain parties for loans totaling $200,000  to
the  Company.   The Company advanced such monies to Watchout!  in
furtherance  of  its Agreement of May 30, 1997.  The  loans  were
funded by:

           (a)   An  18%  Senior note issued by  the  Company  to
Raymond Larkin in the amount of $50,000 due September 3, 1998  in
full with interest.

           (b)   An   18%  Senior note issued by the  Company  to
Watchout-Goldpoint Partners for $150,000 due September 3, 1998 in
full with interest.

     In addition, the Company granted warrants to purchase common
shares at $.01/share as an inducement to the lenders to make  the
loans.   The  options expire on September 3, 2002.  The  warrants


<PAGE>

are to Raymond J. Larkin for 75,000 shares and to Watchout Goldpoint 
partners for 225,000 shares.

      Further,  the  Company granted warrants to purchase  25,000
shares  each to Mark Hollo and Sands Brothers & Co.  The warrants
are exercisable at $.01 per share on or before September 3, 2002.

      The  Company,  in  a separate transaction  related  to  the
Watchout! Agreement, agreed to issue warrants to purchase a total
of  250,000  common  shares  of the  Company  @  $.10  per  share
exercisable two years from September 19, 1997.  The warrants  are
to  be issued to John Bader and William Williams for 166,000  and
84,000, respectively.

Item 6.   Exhibits and reports on Form 8-K

           (a)   The  following  are filed as  Exhibits  to  this
Quarterly Report.  The numbers refer to the Exhibit Table of Item
601 of Regulation S-K:   None.

           (b)  Reports on Form 8-K filed during the three months
ended September 30, 1997. (incorporated by reference)  None.

          NOTE: Form   8-K dated September 24, 1997 and filed
          October  3, 1997 should be reviewed by readers of  this
          Form 10-QSB, together with the exhibits thereto.
          
                           Signatures

      Pursuant to the requirements of the Securities Exchange Act
of  1934, the registrant has duly caused this report to be signed
on its behalf of the undersigned thereunto duly authorized.


Dated: January 15, 1998

                              WHITE CLOUD EXPLORATION, INC.



                              By:  /s/ Robert Galoob
                                   Robert Galoob, President